Should corporate taxes be higher?

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I hear Thom always gets very upset when it comes to corporations not paying their fair share. I want to pose some questions though.

What is a corporation? It is an organization that employees people usually with the purpose of offering a good or service in exchange for money. If a corporation makes no money then how many people does it employee? In the long run a corporation that doesn't make money will not exist unless it receives funding from somewhere else so the easy answer is that a corporation without profits (other than a non-profit) will not employee any people because it will go out of business. When a corporation makes a profit where does that money go. A corporation is like an individual in this matter as it has the same choices: save, invest or spend. They do have one additional option and that is to distribute to their shareholders.

A corporation that saves its cash does what with it? This money typically sits in the bank and the bank turns around and uses such capital to make loans and such. If a corporation has a lot of cash they become targets for corporate take-overs as many companies would like to put that cash to more efficient usage than just sitting in the bank.

Investment for a corporation usually means investing in itself and its future. They can make capital investments in plant and equipment thus putting themselves in a position to make more money and hire more employees. As they make such purchases and hire more people they flood the economy with more money making it more feasible for their vendors to employee people. If corporations don't make these investments it will lead to a decrease in economic activity. Investments typically lead to higher share prices and increase value of the corporation.

Corporations can also spend money outside of capital. This can be money spent on employees, travel, entertainment, etc. Again the spending of money is money going back into the economy and spurs economic growth.

Distribution is an area whereby the company's profits is taken back by the owners/shareholders. What is the point of ownership of a company other than it is an investment for one's money. Almost every major corporation is owned by investors such as mutual funds, retirement funds, employees, retirees, etc. It is rare to see an individual own large pieces of big corporations. These distributions are typically in the form of dividends which are taxed on the individual level.

How much should corporations be taxed. When I listen to Thom's show I'm under the impression that he believes that corporations should be taxed at very high levels. What does this mean for the economy? If corporations are taxed at high levels it usually comes at the expense of those company's being able to make investment thereby slowing the growth of that company. On a larger scale it slows the growth of the entire economy. At the same time corporations usually mitigate any increase in cost including taxes by passing these expenses on to their customers. This means that consumers pay more meaning they have less for their own savings and investment leading further to a slow down in the economy.

Most corporations are owned by investment companies in the form of mutual funds or retirement accounts. If there is an increase in corporate taxes this tax money comes from these people/accounts. If taxes were lower than there would be an increase in corporate value which would either be a capital gain or possible distribution to these shareholders. So if we made it so that corporations were not allowed to earn a profit what would this do to our nation's retirement system? Why would any individual make an investment in business if they couldn't get a return?

I'm not saying that business's should not pay any taxes but corporations should not be taxed at high levels especially when the economy and job market are lagging. My personal opinion is that all corporations, large or small, should be offered a significant tax break for every employee that they hire. This could be a short term subsidy which would lead to major economic benefits as people go back into the work force and corporations have the ability to grow and invest thus spurring the entire economy.

abospaum's picture
abospaum
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May. 4, 2012 4:02 am

Comments

But... who's going to pay for the environmental destruction these corporate enterprises and the social systems that have arisen to support them have been wreaking on the planet for decades and is now cumulating into a crisis? What does it cost to put eco systems back together? To replenish the fresh water of the planet that industrial agriculture uses to make its profits? That's an accounting measure that it appears only a broader community can take, since infinite growth and profit entities, like private corporations, seldom if ever look that far in advance. Yet corporations have said now that they own government, don't regulate us, you won't have jobs, don't tax us, you won't have money and you can't retire. Sounds suspiciously like blackmail.

But who (other than their indentured serfs, who are already deep in debt for their homes, for their cars, through corporate credit cards for the products of corporations produced now by low cost labor in other lands, for their very education that trains them for jobs in the corporate system) is going to pay for the roads and other transportation support structures these enterprises use in order for their barter and trade to occur, how about the expensive public legal system that enforces their rights to do business? Now that they have international trade barriers reduced and transformed in their favor, who pays for the military industrial complex that makes the world safe for them to do business; and on and on?

Why always this atomistic thought process that focuses on jobs and business growth as the ultimate answer to their "don't tax me" attitudes? And if someone notices there's a system here, and there are damages and costs to everyone, they quickly scream "socialism!"

If the corporations can't pay their share of the system's costs, if they have to have these profits or they fail, maybe the whole system's not viable. Maybe their wealth is ultimately a lie.

.ren's picture
.ren
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Apr. 1, 2010 6:50 am

I didn't say that corporations shouldn't pay anything at all. I simply was making the point that my increasing taxes on corporations is a horrible thing to do from an enconomic standpoint in a struggling economy. If you take away incentive and opportuntiy to grow then guess what, you stagnate. Stagnation leads to less money available for the government as well as individuals. Higher tax rates on corporations may pay more for a year or two but over any extended period of time will lead to dramatically less tax revenue. The number one thing that grows tax revenue is to increase GDP and combine this by increasing the workforce (the number of people paying taxes) and you have a way to pay for everything.

Why do you say that corporations pollute. Corporations cannot do anything physical as they don't have arms. People pollute and if they do so illegally then they go to jail. Also as corporations are composed of people and people need to drink water and breathe air they do not typically desire to have dirty air or water. If you look at how paper and timber companies were excurriated for destruction of forests but they were the ones to plant more trees and implement programs to preserve and grow our forests. Just the same as fisherman take care not to overfish their own livelihood.

Capitalism frees the individual from serfdom. It is when people become reliant on others for their own sustainence that they are serfs and sacrifice their freedom. When one is free to work hard and the government does not interfere with their ability to succeed that we become free. Perhaps you consider China and the former Soviet Union as models where citizens were freed from serfdom.

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abospaum
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May. 4, 2012 4:02 am

I think they should be simplified. We have the highest rate combined with low collections. The worst of both worlds. I also think income earned abroad should be tax free, or at least at a nominal rate, when brought home to spend. Why would we want to discourage corporations from investing here?

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WorkerBee
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Apr. 28, 2012 11:22 am
Quote abospaum:

Capitalism frees the individual from serfdom. It is when people become reliant on others for their own sustainence that they are serfs and sacrifice their freedom. When one is free to work hard and the government does not interfere with their ability to succeed that we become free. Perhaps you consider China and the former Soviet Union as models where citizens were freed from serfdom.

I do enjoy watching you folks spew out the corporate program.

You have no idea what I'm talking about, do you?

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.ren
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Apr. 1, 2010 6:50 am

So don't tax corporations. Tax the shareholders. And if the shareholders individually want to lobby the government, they can do so. The PROPERTY they own shouldn't have the power to appoint an agent to lobby in their interests, unless their interests are unanimous. Which may be possible with a nonpublicly-traded corporation of, say, 3-4 shareholders.

chilidog
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Jul. 31, 2007 3:01 pm

Probably since corporations are only taxed on their profits, they won't go bankrupt paying taxes.

It would be nice if they at least paid the current tax rate instead of avoiding taxes altogether with favored loopholes. and offshoring corporate headquarters to a mailbox in tax havens.

If an individual offshored their address to avoid paying earned income in the U.S., they'd go to jail.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

Pennies on the dollar - or just a shilling here and there?

ManyFish thankfully reminds us that unlike workers' wages corporations only pay tax on their profits. This makes for a huge difference from the get go.

As for profits engineered to occur overseas, we already have the "foreign tax credit". So any tax paid to foreign governments counts toward the U.S. tax due - which makes it really sleazy for corporations to work so hard to avoid whatever the balance due would be.

Particularly pathetic that they don't contribute to at least the cost of the Military that protects their overseas businesses and the costs of the Courts who protect their international patents and copyrights.

However, the real issue, that these discussions are intended to distract from, is that the very distribution of ownership of corporations would be more evenly spread among the greater population if the fraudsters hadn't been allowed to keep the ill-gotten gains from the various bubble schemes in the first place.

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Rodger97321
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Jul. 31, 2007 3:01 pm

No they should not be higher that will just continue to drive companies out and prices up. Its simple economics if it costs more to produce then they have to charge more and at a cetain point the market is not willing to pay that so we loose the little manufacturing we still have to outsourcing. You wanna know the real force driving outsorcing?

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm

Tax breaks that reward it instead of "punishing" it. If you are taking economics courses, try anthro. Ask some basic questions about the dogma being taught. High corporate taxes force businesses to reinvest profits it useful ways rather than paying off the investors and top dogs with billions and causing a serious system imbalance for "the economy." Austerity creates big social problems which are also expensive to fix compared to redoing the financial system. If the choice is saving the society or "the economy," you save the society and make the economic adjustments needed, meaning those with the money have to cough it up.

You post just like a college conservative so I take it you are one. Sophomoric, simplistic and philosophically selfish ideas appeal to late adolescent focus on individual formation and discovery of self. To see the logic of "we" beyond what makes sense to "me" one has to be "me" without all the ego. But, to appreciate how systems and interdependence works does require more than individualism or the reduction of humanity to our economic functions.

The whole idea of why we allow people to band together to own a corporation to make money depends upon it being good for us rather than what Poly describes as a way to sluff off the costs while taking all the profits. There is no independent right to "make money" if a government program can do the same for less. It is just we owning it instead of renting it. If you love huge military empire as your expression of human freedom, you can still be a conservative today. So, we get wars, prisons and schools being closed.

What do you think of fiduciary responsibility and the morality of corporations needed for a successful society? How did that work on Wall St. or in the Gulf?

drc2
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Apr. 26, 2012 11:15 am
Quote drc2:

Tax breaks that reward it instead of "punishing" it. You post just like a college conservative so I take it you are one. Sophomoric, simplistic and philosophically selfish ideas appeal to late adolescent focus on individual formation and discovery of self. To see the logic of "we" beyond what makes sense to "me" one has to be "me" without all the ego. But, to appreciate how systems and interdependence works does require more than individualism or the reduction of humanity to our economic functions.

The whole idea of why we allow people to band together to own a corporation to make money depends upon it being good for us rather than what Poly describes as a way to sluff off the costs while taking all the profits. There is no independent right to "make money" if a government program can do the same for less.

There is the biggest flaw in your argument you dont allow me to do anything the market does. If i want to start of business as long as people are willing to buy it then i am allowed to do business. Tax breaks also are a falacy cause you are not giving me anything you are simply taking less of what i earned. I have a right to make a service or product and charge for that what i see fit and what the market will support. I have never ever heard of anything being done more efficiently by goverment then the private sector.

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm

Cutting taxes is good. Adding to the deficits is also good! I have often blogged this SUMMARY:
1.(National govt_ debt = National peoples' wealth). A numerical verification of this using published data is given in
http://pshakkottai.wordpress.com/2012/02/27/national-debt-and-national-wealth-compared/
2. GDP = 5* govt_spending, approx
3. National debt = GDP, approx but generally GDP can be higher by a fair amount
4. Deficits are highly desirable to grow the economy, considering that there is no inflation risk with so much excess capacity in the economy.
5. Reduction of taxes is good because deficit increases
6. FICA can be eliminated because deficit increases
7. Austerity of states is unnecessary because more money to the states increases demand which is good for private sector growth
8. All university education is a national investment and can be supported fully
USA does not need to depend on taxes to fund anything
9.(govt-debt /GDP) has no limit being the same as (National wealth/ GDP).
USA is the wealthiest nation in the world, is monetarily sovereign, can deficit spend without fear of inflation and it is time it started acting like one.
Deficits are the source and taxes are the sink for the economy which is mostly for the benefit of the private sector. Wall street Journal is also talking in terms of household budgets. (Income = expenses + savings), rather than
(Federal Deficits = Net Private Savings+ net imports), to confuse people! The CBO certainly knows the correct equations.

Talking about taxes is a distraction. What is required is deficit spending to grow the economy and put an end to austerity.

pshakkottai's picture
pshakkottai
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Quote CollegeConservative:
Quote drc2:

Tax breaks that reward it instead of "punishing" it. You post just like a college conservative so I take it you are one. Sophomoric, simplistic and philosophically selfish ideas appeal to late adolescent focus on individual formation and discovery of self. To see the logic of "we" beyond what makes sense to "me" one has to be "me" without all the ego. But, to appreciate how systems and interdependence works does require more than individualism or the reduction of humanity to our economic functions.

The whole idea of why we allow people to band together to own a corporation to make money depends upon it being good for us rather than what Poly describes as a way to sluff off the costs while taking all the profits. There is no independent right to "make money" if a government program can do the same for less.

There is the biggest flaw in your argument you dont allow me to do anything the market does. If i want to start of business as long as people are willing to buy it then i am allowed to do business. Tax breaks also are a falacy cause you are not giving me anything you are simply taking less of what i earned. I have a right to make a service or product and charge for that what i see fit and what the market will support. I have never ever heard of anything being done more efficiently by goverment then the private sector.

Of course you haven't heard of things being more efficient done by government, because you probably get your "news" from drug addled perverts like Rush Limbaugh. Here in AZ, our "for profit" private prisons are costing the state about $25 mil more for medium security prisoners than the state can, while simultaneously having the facilities degenerate faster and do a worse job preventing escapes and riots.

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 7:21 pm

There is a good blog by Mitchell

–The myth of private enterprise superiority, reduced government and Ronald Reagan. « #Monetary Sovereignty – Mitchell

which gives examples of this myth.

pshakkottai's picture
pshakkottai
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Jul. 11, 2011 10:27 am

The current % of revenue garnered from corporations is the lowest it has been since Truman or before. The companies did pretty well at the old corporate tax rate. This was before lobbying paid a roi of around 400% when the legislation lobbied is tax specific. Cheney got clean water legislation suspended during his closed door energy conferences. The cost of families now stricken with cancer really doesn't cost that much, because they don't have insurance and they die before SS kicks in. American despotism, sorry I meant capitalism at it's finest. I just couldn't tell the difference between those tems when the preceding adjective is American.

Gee the corporations will leave if we tax them at the same rate in place while they made their fortunes.Tax rate historically as % gdp. Also, if they want military support because their venture is in some risky territory, if they haven't paid for protection too effing bad. And if it turns out we trained the people that committed genocide [think Guatemala] that country should be able to file both criminal and civil charges in International court. Romney says he'll never apologize, so a good question of him at debates would be why he supports genocide, and sees nothing wrong with it.

United Fruit has the same story, Unocal same story. Iraq didn't attack us before Gulf l or Gulf ll, we just like to blow things up, and send poor kids off to die and be dismembered, it's part of business.

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douglaslee
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Jul. 31, 2007 3:01 pm

Nice right wing spin on reality. So, which right wing organization do you represent? And if you try denying this and insist you're actually a liberal I will respond with what Chris Hedges regards liberals in this country as - total clowns.

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raoul
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Jul. 31, 2007 3:01 pm

College conservative? I guess they don't teach proper English grammar at your school right? Case in point - it's 'lose' not 'loose'. And the real reason for outsourcing is simple - corporate greed and avarice.

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raoul
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Jul. 31, 2007 3:01 pm

I gave up on "lose" and "loose" years ago on the internet. It is remarkable how many otherwise intelligent people do not understand the difference.

chilidog
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Jul. 31, 2007 3:01 pm
Quote CollegeConservative:

No they should not be higher that will just continue to drive companies out and prices up. Its simple economics if it costs more to produce then they have to charge more and at a cetain point the market is not willing to pay that so we loose the little manufacturing we still have to outsourcing. You wanna know the real force driving outsorcing?

The tax is on profit, not costs.

This is the mistake that all conservatives make all the time. They think it is like a sales tax or something.

Taxing profits is not that harmful to the economy, unless you can't finance your capital. It prevents firms from having lots of cash. That's why there is no long run relation between tax rates and growth, employment, economic productivity or anything.

Dr. Econ's picture
Dr. Econ
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Jul. 31, 2007 3:01 pm
Quote .ren: But... who's going to pay for the environmental destruction these corporate enterprises [make]

Right, but all these things are because of faults elsewhere - military spending, subsidies, lower income taxes.

It is important to point out, I think, that if income taxes, the environment and military spending could be priced correctly, then the corporation tax should be small, not large as Thom suggests. Thom keeps saying 'they use the commons'. But most of government spending besides defense is health care and transfers to the elderly, which corporations really could have nothing to do with.

It's important to point this out so we don't keep making weak, nonsensical arguements like Thom does in this case.

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Dr. Econ
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Jul. 31, 2007 3:01 pm

U don't get it a tax on profit becomes a cost of doing business in this country and if the cost of doing business is less else where they will go there we need to be tax competitive with the rest if the world.

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm

No, "U" don't get it.

U get it just a little.

Taxing corporate profits does lower the return on capital for the shareholders, which may cause investors to look elsewhere for a better return.

But that is not the same thing as saying that taxing corporate profits are a cost of doing business that will lead to higher prices in the short run.

chilidog
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Jul. 31, 2007 3:01 pm

The higher the tax on profits the more of those profits are reinvested in the company which will lower their taxes. If taxes are too low then they will just pocket the profits and or invest them outside of the company. Shareholders love it when profits are reinvested in the company because they know that means more money for them in the long run and a much more stable investment.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am

If I can do business in the us at a 35% tax rate or Japan at 15% where would u gO?

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm

So take your capital to Japan.

And take yourself with you.

I don't mean that as a slight. Citizenship means something. I don't think you're going to grab a rifle and run to the front of the line if at some point down the road the Japanese decide to take your investment.

chilidog
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Jul. 31, 2007 3:01 pm

I think you're confusing taxes on corporate profits with taxes on dividends, but maybe I'm not following you.

IMO, taxes on dividends should be lower than taxes on capital gains. This would make the shareholders demand their dividends, and then they can decide if they want to reinvest in that company. The way taxes are now, shareholders don't want the dividends, which they will pay tax on today, when they can have the capital gains (and pay the taxes) tomorrow. This causes the corporations to "find" some return for the cash, so we have shoe companies buying cereal companies or other such nonsense.

chilidog
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Jul. 31, 2007 3:01 pm

I can still beas citizen and do business in another country.

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm

But Japan has a VAT, universal healthcare paid with a2% tax, and a top rate of 45%, and they don't waste vast sums on a global empire.

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 7:21 pm

What's the point? Every corp has a roomful of accountants to work around the tax code and an army of lobbyists to create loopholes that benefit the corps. Plus many industries have never borne the cost of their pollutions. You live near a refinery or chemical plant and have highers rates of sickness-ever seen the polluter pick up the medical tab. Privatize profits-socialize harm. At least with universal healthcare you could make a case that corps are paying something thru taxes for the costs for the harms they place on a society. Some of you may remember the EPA Superfund in the 70's which has virtually disappeared and left govt on the hook for old corp pollution cleanup.

lovecraft
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May. 8, 2012 11:06 am

I was just using Japan as an examplewith a made up precent

CollegeConservative's picture
CollegeConservative
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May. 4, 2012 1:22 pm
Quote CollegeConservative:

I can still beas citizen and do business in another country.

So you think Marc Rich got screwed?

chilidog
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Jul. 31, 2007 3:01 pm

Also, since you admit to having pulled the Japan number from your ass,

http://www.worldwide-tax.com/japan/japan_tax.asp

Their rate is 25.5% plus a 10% surtax on corporate taxes.

It is also nice to know you are true conservative, and have no respect for facts and figures.

It is impossible to debate or discuss anything with people who have no sense of honesty or integrity. Example # collegeconservatard.

But other than that Mrs Lincoln, how was the play?

The reason businesses chose to open shop in Japan was never tax rates, but rather low wages, and a populace that hates unions, coupled to a nation that has universal healthcare, all which combine to keep wages low and employer costs low.

Businesses found by the late 1980's that Japan sucked, wages were too high. South Korea was the place to go.

Then they got to be too expensive. Then it was Mexico. Their wages became too high, then it moved to China and Singapore, and India and Brazil... businesses will go any place where they can pay lower wages and escape laws that hold them financially responsible for their actions.

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 7:21 pm

There are several falsehoods/fallacies presented in this post and you may or may not be aware of them. These become part of the Conservative meme and I am a firm believer that the Republican elite know what they are saying is incorrect but they are counting on the people listening to not really understand why what they are saying is wrong. You could be either party. Either way, I can't let the lies lay here and maybe this will help some others here dispel the lies later on.

Quote abospaum:

I hear Thom always gets very upset when it comes to corporations not paying their fair share. I want to pose some questions though.

What is a corporation? It is an organization that employees people usually with the purpose of offering a good or service in exchange for money. If a corporation makes no money then how many people does it employee?

There is NO WAY for taxes to reduce a profit margin to zero unless the tax rate is 100%. The highest rate I have ever heard Hartmann suggest is 70% but usually that is inreference to wealthy individuals and not corporations. This is the first slight of hand in the post. No one is suggesting profit isn't needed. Taxes always take only a percentage. So this is a formal logic problem. They always put this up front in their argument despite knowing it is utter BS.

In the long run a corporation that doesn't make money will not exist unless it receives funding from somewhere else so the easy answer is that a corporation without profits (other than a non-profit) will not employee any people because it will go out of business.

Here is the other slight of hand. Yes, a company that doesn't make profits will go out of business. But the only way they don't make profits is if their business model is wrong. It has nothing to do with taxes. But what the slight of hand is in this respect is that they are trying to equate higher taxes with the elimation of profit which equals the elimination of jobs. Uh... no. Why? Because employee costs are PRETAX as are all the other costs of business. I'll come back to this in a second.

When a corporation makes a profit where does that money go. A corporation is like an individual in this matter as it has the same choices: save, invest or spend. They do have one additional option and that is to distribute to their shareholders.

This is the third slight of hand. Corporations have absolutely nothing in common with individuals even from an economic standpoint. The options you provide are a little wonky. For example, how are you differentiating between spending and investing? Or saving and investing? Spending is on business costs? Is investing like in a bank portfolio or in their business? How is that different from either saving or spending respectfully? In any case, these are not very precise. However that doesn't matter much. Really what it comes down to is that all business expenses are PRETAX - except for the taxes you have to pay on the salary themselves like payroll but even then you simply figure that into your salary alottment. Corporate INCOME taxes never impact the decision to hire. In fact, they can be an incentive to hire. If your corporate tax is low, you have a lot more incentive to horde the profit. If the incomes tax is high, there may be greater incentive to keep investing the money back into growing the business by hiring new employees. So the logic is completely upside down.

A corporation that saves its cash does what with it? This money typically sits in the bank and the bank turns around and uses such capital to make loans and such. If a corporation has a lot of cash they become targets for corporate take-overs as many companies would like to put that cash to more efficient usage than just sitting in the bank.

Right so companies don't really sit on their money. They pay it out to their investors that then sit on the money. The wealthy typically only spend about 20% of their income/capital gains. This is the quintessential hording problem the Keynes pointed out about Says Law. Now, you can disagree with Keynes solutions but the observation about hording is very real and empirically proveable.

Investment for a corporation usually means investing in itself and its future. They can make capital investments in plant and equipment thus putting themselves in a position to make more money and hire more employees. As they make such purchases and hire more people they flood the economy with more money making it more feasible for their vendors to employee people. If corporations don't make these investments it will lead to a decrease in economic activity. Investments typically lead to higher share prices and increase value of the corporation.

Exactly and higher income taxes INCREASES this incentive because the company make more use of their money PRETAX by hiring more people and investing in growth.

Corporations can also spend money outside of capital. This can be money spent on employees, travel, entertainment, etc. Again the spending of money is money going back into the economy and spurs economic growth.

Distribution is an area whereby the company's profits is taken back by the owners/shareholders. What is the point of ownership of a company other than it is an investment for one's money. Almost every major corporation is owned by investors such as mutual funds, retirement funds, employees, retirees, etc. It is rare to see an individual own large pieces of big corporations. These distributions are typically in the form of dividends which are taxed on the individual level.

But this is taxed as corporate income first.

How much should corporations be taxed. When I listen to Thom's show I'm under the impression that he believes that corporations should be taxed at very high levels. What does this mean for the economy? If corporations are taxed at high levels it usually comes at the expense of those company's being able to make investment thereby slowing the growth of that company. On a larger scale it slows the growth of the entire economy. At the same time corporations usually mitigate any increase in cost including taxes by passing these expenses on to their customers. This means that consumers pay more meaning they have less for their own savings and investment leading further to a slow down in the economy.

I am not sure if this is accurate. I think he thinks capital gains taxes should be high and I think he thinks the wealthy should have high income taxes but I don't really think he suggests astronomical corporate rates. The issue with corporate taxes is not the rates but the sweetheart deals they get. The exemptions, the tax handouts that negate the revenue they bring in, etc. For example, some large companies don't pay State taxes at all. They make sweetheart deals with the state legislature to eliminate their tax burden under threat of moving to a different state. This is even more of a problem than Federal taxes because state cannot establish tarrifs for goods (that is interstate commerce). There is more to say about that but sort of off topic here.

Most corporations are owned by investment companies in the form of mutual funds or retirement accounts. If there is an increase in corporate taxes this tax money comes from these people/accounts. If taxes were lower than there would be an increase in corporate value which would either be a capital gain or possible distribution to these shareholders. So if we made it so that corporations were not allowed to earn a profit what would this do to our nation's retirement system? Why would any individual make an investment in business if they couldn't get a return?

Uh again no. Corporate taxes do not come out of the accounts. It comes out of corporate profit. You are trying to make it sound like they have to pay out of these accounts to cover the tax burden. Silly. This confirms in my mind that you are intentionally lying here.

I'm not saying that business's should not pay any taxes but corporations should not be taxed at high levels especially when the economy and job market are lagging. My personal opinion is that all corporations, large or small, should be offered a significant tax break for every employee that they hire. This could be a short term subsidy which would lead to major economic benefits as people go back into the work force and corporations have the ability to grow and invest thus spurring the entire economy.

The tax break for employee hiring is something that Democrats have been fighting for fora long while. Typically these bills get blocked by Republicans for flat handouts. Do you know who you are voting for? If you really wanted to make corporations hire, you would jack up the corporate tax rate for large businesses (not small) to about 50% and then tell them they get a 10% reduction for every 100,000 people they hire for a job that pays a middle class wage.

ah2
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Dec. 13, 2010 9:00 pm
Quote CollegeConservative:

U don't get it a tax on profit becomes a cost of doing business in this country and if the cost of doing business is less else where they will go there we need to be tax competitive with the rest if the world.

But that is a different objection, and a new one. You were arguing, somehow that taxes by themselves reduce economic growth and raise unemployment. When you suddenly realized that taxes on profits could not effect costs you invented a new arguement - people can take their cash overseas.

I find this new objection - taken by itself - to be profoundly absurd. Do we care if people go elsewhere if we tax them to pay for government services you support? What if I said, "you can't spend money on defense because people will leave and go elsewhere"?

At some point you have to ask, do you love your country or not?

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 3:01 pm
Quote CollegeConservative:

I can still beas citizen and do business in another country.

So you are ok with Mexicans coming over here to work? I thought I read somewhere that you were dead against that.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 6:53 am

thats totally different I can invest my money legally overseas with still retaining my citizenship. I am fine with them coming over legally and doing work.

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 1:22 pm

This is why Thom doesn't just leave it at a higher corporate tax rate. He also believes in the reinstitution of protective tarriffs for domestic industry. The one thing US still has going for it is that we have the largest consumer base in the world. International Corps NEED to sell their products in the US to retain their profit margins at current levels. If you reinstituted protective tarriffs to protect domestic production - in other words, make it more costly to import goods than to deal with the corporate tax rate - then the companies will not leave. This is really such common sense, I am surprised you can't wrap your head around it.

ah2
Joined:
Dec. 13, 2010 9:00 pm
Quote CollegeConservative:

thats totally different I can invest my money legally overseas with still retaining my citizenship.

That's the sound of a true Republican Patriot.

Dr. Econ's picture
Dr. Econ
Joined:
Jul. 31, 2007 3:01 pm
Quote ah2:

This is why Thom doesn't just leave it at a higher corporate tax rate. He also believes in the reinstitution of protective tarriffs for domestic industry. The one thing US still has going for it is that we have the largest consumer base in the world. International Corps NEED to sell their products in the US to retain their profit margins at current levels. If you reinstituted protective tarriffs to protect domestic production - in other words, make it more costly to import goods than to deal with the corporate tax rate - then the companies will not leave. This is really such common sense, I am surprised you can't wrap your head around it.

This is why higher gas prices are actually good for America.

$2.00 a gallon gas is a 4% tariff on imports from China, India, and Singapore. $4.00 a gallon is a tariff 7%. The higher the gas price, the more sensible it becomes to reopen the factories in the American Rustbelt, and Windsor, Canada, and even open more factories in Mexico.

Bring back tariffs, and institute domestice content laws for govt purchases, and copy Germany's labor laws.

Phaedrus76's picture
Phaedrus76
Joined:
Sep. 14, 2010 7:21 pm

You mean that I believe in individual freedom, private property and personal responsibility?

CollegeConservative's picture
CollegeConservative
Joined:
May. 4, 2012 1:22 pm

No you lack a fundamental understandinfg that your lot in life is improved more by helping those around you rather than serving only yourself.

ah2
Joined:
Dec. 13, 2010 9:00 pm
Quote CollegeConservative:

You mean that I believe in individual freedom, private property and personal responsibility?

"You" will not bear "the personal responsibilty" of protecting your "private property" that is in Japan, Vietnam, Kuwait, Iraq, Iran...

chilidog
Joined:
Jul. 31, 2007 3:01 pm

Currently Chatting

The other way we're subsidizing Walmart...

Most of us know how taxpayers subsidize Walmart's low wages with billions of dollars in Medicaid, food stamps, and other financial assistance for workers. But, did you know that we're also subsidizing the retail giant by paying the cost of their environmental destruction.

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